In its announcement, The Treasury said it would “not be right” to outline long term economic plans amid the current crisis.
Chancellor Rishi Sunak is to address Parliament today to outline the Government’s plans to protect jobs and the economy through the winter as the Treasury comes under increasing pressure to extend the furlough scheme ahead of its expiry at the end of next month.
The cancellation of the budget has met with approval from several commentators from the financial services sector.
Financial Planning and wealth management giant Quilter have supported the announcement and have said if the Chancellor manages to avert a major jobs crisis over the winter, he may use the support he gains to implement tax rises in March 2021 ahead of the new tax year.
Rachael Griffin, tax and financial planning expert at Quilter, said: “The time to fix the roof is when the sun is shining, so It makes sense for the Chancellor to delay the tough decisions until at least next Spring. By then government will hope to have a much better idea of whether an effective vaccine is viable for next year, and the UK’s longer-term relationship with the EU ought to be clearer.
“At the moment it would be extremely challenging to make long-term policy decisions with so much up in the air. As we learn more over the coming months it may become a little easier to build an informed projection about the trajectory of the economic rebound. In turn, that makes it easier to build an evidenced based case for what may be some difficult policy decisions.
“The Conservatives will likely wish to maintain their reputation for prudence by reducing debt over the course of the Parliament, as they promised in their Manifesto. Although the goalposts have changed somewhat, it is difficult to see the Chancellor throwing caution to the wind and abandoning that pledge altogether. That means he faces the deeply unenviable task of repairing public finances without implementing tax policies that adversely impact recovery.
“Rishi Sunak’s stock is currently pretty high. Polling shows he has come through a rollercoaster six months in good shape, with the public clearly approving of measures like furlough. If he can avert a major jobs crisis over the winter – a difficult challenge - and maintain some of that good feeling with the public then perhaps he may yet be tempted to use it as a platform to implement some difficult revenue raising measures in March, ahead of the new tax year.”